It is not often that I agree with Microsoft. But this to me is the same as censoring TV programmes because ‘children may be watching’. The best option is to educate children.

What happens is that all shows get dumbed down, but stay just as violent. This would happen on the internet to. Would it be the accidental blockees that would break through (I was once blocked in a school for searching ‘Play’ and ‘Tents’ while doing a tent construction project).

No. Porn will always find a way through. As will anything that someone wants to block. There are hundreds of ways through, so stop treating the symptom and look for the cause.

A few weeks ago, the band Radiohead made waves by making their new album In Rainbows available online as a free download. But people could also decide how much they wanted to pay for it. This experiment was greeted with gleeful incredulity by many cynics, who opined that Radiohead had showed a touching but naive faith in human nature, and predicted that freeloaders would so outweigh the paying customers that the experiment would be a financial flop.

The band haven’t officially released any figures. But a web-monitoring outfit called Comscore released data claiming that 62 per cent of customers set their price at zero, with the remaining 38 per cent setting an average price of $6, which comes to an average $2.28 per customer – or £1.29 in UK money. This seems plausible to me. In our household, for example, I paid £8, which I reckoned to be the average retail price of a CD, but two other family members downloaded the album for free – which eant that Radiohead’s take from this particular dwelling averaged out at £2.66 per head.

Collapse of stout band, then? Not at all. Ed Felten of Princeton University published some back-of-envelope calculations on his blog. ‘Imagine,’ he writes, ‘that there are 10 customers willing to pay $10 for your album, 100 customers willing to pay only $2 and 1,000 customers who will only listen if the price is zero.’ (For simplicity, assume the cost of producing an extra copy is zero.)

If you price the album at $10, you get 10 buyers and make $100. If you price it at $2, you get 110 buyers and make $220. Lowering the price makes you more money. Or you can ask each customer to name
their own price, with a minimum of $2. If all customers pay their own valuation, then you get $10 from 10 customers and $2 from 100 customers, for a total of $300. You get perfect price discrimination – each customer pays their own valuation – which extracts the maximum possible revenue from these 110 customers.’

Felten goes on to point out that there might be some intangible value to be extracted even from those who paid nothing. The experiment might, for example, make them better disposed towards the band, or more likely to recommend
the album to their friends. Either way, Radiohead’s gambit may have been shrewder than the numbers would at first indicate.

Actually, it might be even smarter than Felten thinks. Some years ago, William Fisher of Stanford University published some interesting data on the cost structure of CDs. According to his figures, the retailer’s slice of the CD is 38 per cent, while distributors take 8 per cent and marketing another 8 per cent.

The artist, in contrast, typically
gets only 12 per cent and the music publisher 4 per cent. So the
maximum Radiohead would get from a conventionally marketed CD priced at £8 is actually £1.28 – which, coincidentally, is almost exactly what Comscore thinks they got from their online experiment.

Social networks are changing the accessibility of music, helping it to become more democratic and utilitarian and this, according to the 2007 Digital Music Survey released today by music and entertainment research specialists, Entertainment Media Research and law firm Olswang, is having a profound impact upon the discovery and purchase of music, with far-reaching implications for the music business.

The Impact of Social Networks on Music Discovery & Purchase

The Digital Music Survey is currently in its fourth year and is an independent survey of 1,700 UK consumers. The research indicates massive increases over the last 12 months in usage of sites containing music such as YouTube (up 310% to 53%) and MySpace (up 57% to 55%). Amongst teenagers the incidence is huge – 77% have used MySpace and 69%, YouTube.

For users of these social networks, music is playing an increasingly important role. For example, 39% of social network users have embedded music in their personal profiles (65% of teenagers). Approximately 70% do so to show off their taste and half do so to reflect their personality. What’s more, it seems to work as almost 60% agreed that they could tell a lot about a person from the music in their profile.

The survey findings strongly suggest that social networks are also impacting music discovery. 53% of people revealed they actively surf social network sites to discover new music and artists and two-thirds of all users regularly or occasionally discover music that they love on their preferred social network site. The incidence is higher still on MySpace (75%), Bebo (72%) and YouTube (66%).

Crucially, the discovery is translating into changing purchase behaviour. 17% of social network users claimed it has a “big/massive impact” on the way they purchase music and 30% state that they “regularly/occasionally” buy CDs or downloads of music that they discovered on a social network site. This rises to 36% of MySpace users.

However, more needs to be done to make purchasing this music easier, with 46% of respondents agreeing with the statement “I wish it was easier to purchase music that I find on these sites.”

”Social networks are fundamentally changing the way we discover, purchase and use music. The dynamics of democratisation, word of mouth recommendation and instant purchase challenge the established order and offer huge opportunities to forward-thinking businesses.”

John Enser, partner and head of music at Olswang, says, “The music industry needs to embrace new opportunities being generated by the increasing popularity of music on social networking sites. Surfing these sites and discovering new music is widespread with the latest generation of online consumers but the process of actually purchasing the music needs to be made easier to encourage sales and develop this new market.”

Is Legal downloading still booming?

After the dramatic 40% increase in the number of legal downloaders between 2005 and 2006, it appears the rate of growth of legal downloading is in decline. Over the last 12 months the total number of people legally downloading only rose by a much more modest 16% to 58% of music consumers. What’s more, the number of consumers who have stopped legally downloading music increased from 9% to 11%. In addition, 22% of legal downloaders admitted that they had not legally downloaded a track for at least six months (up from 12% in 2006) and the same number said they had only ever downloaded one legal track.

The survey by Entertainment Media Research and Olswang identifies a number of likely explanations for the slowdown:

1. Piracy is on the increase

Illegal downloading has risen to an all time high, with 43% claiming that they are illegally downloading tracks compared to 36% in 2006 and 40% in 2005. There is one clear reason why unauthorised downloading is increasing and that is because consumers are less concerned about being prosecuted (42% gave this as a reason for downloading less in 2006, compared to only 33% in 2007). Going forwards, the trend towards piracy appears to be in real danger of accelerating as 18% claim they will download more unauthorised tracks in the future compared to only 8% in 2006 and 6% in 2005. We note that the drop in fear of prosecution coincides with those prosecutions falling off the front pages of national newspapers.

2. Legal downloads are too expensive

As the retail price of new release CDs has declined materially over the last 12 months so the perceived pricing advantage of digital downloads has been eroded. In 2006, the price advantage of downloads was the third most significant factor (45%) in motivating download purchases. However, in 2007 this has declined to 31%. One measure to help combat this issue might be for music companies to consider introducing variable pricing models. 84% of consumers agreed that older digital downloads should be cheaper whilst 48% claimed they would be prepared to pay more for newly released tracks.

3. Increased awareness and rejection of Digital Rights Management

Digital Rights Management technology (“DRM”) seems to be an increasing concern for legal downloaders. Almost two in three respondents (62%) had heard of DRM (with 42% having at least some knowledge of DRM), of whom the majority (61%) believed that it invaded the rights of the consumer to listen to their music on different platforms. Furthermore, of those that had an opinion (60% of all respondents) 68% felt that single track downloads were only worth purchasing if free of DRM and 22% of all respondents would prefer paying extra for DRM-free tracks, lending support to EMI’s recent decision to release tracks DRM-free.

John Enser, partner and head of music at Olswang, says, “As illegal downloading hits an all time high and consumers’ fear of prosecution falls, the music industry must look for more ways to encourage the public to download music legally. Variable pricing models and DRM free music, which would allow consumers legally to transfer music to other devices, were popular among respondents and represent new ways of enticing people away from breaking the law.”

Radio on mobiles rather than mobile downloading

The 2007 Digital Music Survey reveals some positive news for radio broadcasters. The incidence of listening to the radio on mobiles jumped from 15% in 2006 to a solid 25% in 2007. This is particularly heartening news for broadcasters for two reasons.

Firstly, it indicates that there is a “new” mass market platform with which to grow the critically important breakfast time market both in terms of audience and total listening hours.

Secondly, DAB-equipped mobiles of the future offer the prospect of additional revenue through the sale of music from broadcasters directly to the user’s handset.

Conversely, the outlook for downloading music to mobile via mobile telephony networks remains uninspiring. While a third of respondent consumers transfer music to their mobiles on at least a monthly basis, suggesting that there is increasing acceptance of mobile phones as music players, still only 16% of all downloaders claim to have purchased and downloaded music direct to their mobile phone. Moreover, the potential for rapid growth in the near future seems limited with 57% of downloaders either unlikely or very unlikely to start mobile downloading, whilst a further 9% “don’t really understand how to do it”. It is therefore clear that providers still have some way to go to make downloading to mobile attractive to the mass market.

The love of live music delivers new webcasting opportunities

The 2007 Digital Music Survey also has exciting news for webcasters and content owners with 10% of consumers willing to pay for live webcasts as they happen. Another 74% are interested of whom 31% are “very interested” in live webcasts and although they are not prepared to pay for it, at this level of overall interest one can anticipate an advertising-supported model for webcasting working well in the UK.

This substantial demand for live webcasts reflects the strong positive consumer relationship with live music: 64% agree that music is much more enjoyable when performed live and 59% say they are much more excited about seeing a band live than listening to their album. Additionally, the survey provides evidence of live music stimulating album sales: 57% of respondents often buy an artist’s album after seeing them live and 61% prefer to buy an artist’s new album before seeing them perform live.

Russell Hart, Chief Executive of Entertainment Media Research commented, “The buoyancy of the live music scene combined with consumers’ stated preparedness to pay for live webcast content offers enlightened rights owners the prospect of a valuable new revenue stream.”

Apparently, TV has been dumbed down
The shock. The horror. By not investing in training, we now have TV run by monkeys. This might also explain the sensational coverage of social violence – which leads to the media reinforcing the whole bullying is cool notion of behavior.

Basically, don’t shoot the messenger. If we look at YouTube and don’t like what we see, it’s our own fault. We make it, we upload it, we watch it. It is the same with TV – we have always had control over it! If you don’t like it, don’t watch it! If it is offensive, complain! If you think you can do better, then do so.

Lord Reith had the idea that TV could “Inform, Educate and Entertain”. Nam June Paik thought that Video would break down the Hegemony of the media business and give everyone access to the means of production Both were and are right. TV is now mother, friend, lover and teacher. Trouble is, if we are the only ones doing the educating, isn’t it like an electronic ‘Lord of the Flies’ (‘Lord of the Wi-Fi’s’?) where we build a society on what we want, not what we need?

The problem is, we don’t want to be informed. If there is bullying in our schools, stop it. I just don’t want to see it. Just entertain us while we stick our fingers in our ears and shout ‘La-la-la la-la la’.

We have control over content. We now have control over production. The future is now.